Battle tackles the systematic rot gnawing at the effectiveness of large corporations, the power of small investors to beat the system, and the integrity of enterprise as many of us see it. Bogle cites isolates trends that other writers have noted, such as out-of-control CEO compensation, the dereliction of duty by boards, the systemic siphoning of profits away from investors by conglomerate-owned managed funds, and weaves them all together into a compelling overall argument. Not only that, but he writes wonderfully, to boot. It’s hard to argue with a book so smart and persuasive. The first chapter is available online as an excerpt. Here’s a nugget that I particularly enjoyed:

Over the past century, a gradual move from owner’s capitalism—providing the lion’s share of the rewards of the investment to those who put up the money and risk their own capital—has culminated in an extreme version of managers’ capitalism—providing vastly disproportionate rewards to those whom we have trusted to manage our enterprises in the interest of their owners. Managers’ capitalism is a betrayal of owners’ capitalism, a system that worked, albeit imperfectly, with remarkable effectiveness for the better part of the past two centuries, beginning with the Industrial Revolution as the eighteenth century turned to the nineteenth.

Earlier this fall I had the chance to do a question and answer with the man called Jack. Here’s what he said.

Q: Jack, you are one of the most influential investment figures of the past 50 years. Why have you written this book?

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I thought we had seen all of the lists for 2005, but Forbes published their selections on Tuesday.
To determine the very best of the crop, we polled a dozen writers, editors and publishers from Forbes. Thirty-three books were nominated, which we then winnowed down to the five very best, with the help of the editors of Forbes magazine and Forbes.

There are certain books that suffer from extreme author self-promotion. Contrary to recent published reports, John Bogles Battle for the Soul of Capitalism is not one of them. On Saturday the Wall Street Journal ran a snarky item headlined Man of Letters: Bogle Joins Campaign Urging SEC to Act on Executive PayAnd cites His New Book.

In the December 5, 2005 issue of Barron's, Jay Palmer wrote a piece called The Best Books of 2005. Here is his list:
A Crack in the Edge of the World: America and the Great California Earthquake of 1906 by Simon Winchester
Blood on the Street: The Sensational Inside Story of How Wall Street Analysts Duped a Generation of Investors by Charles Gasparino
Collapse: How Societies Choose to Fail or Succeed by Jared Diamond
Conspiracy of Fools: A True Story by Kurt Eichenwald
DisneyWar by James B. Stewart
Fortune's Formula: The Untold Story of The Scientific Betting System That Beat the Casinos and Wall Street by William Poundstone
One Billion Customers: Lessons from the Front Lines of Doing Busienss in China (Wall Street Journal Book) by James McGregor
The Battle For The Soul of Capitalism by John Bogle
The Big Picture: The New Logic of Money and Power in Hollywood by Edward Jay Epstein
The Emperor of Wine: The Rise of Robert M Parker, Jr.

The Winners
Consider first the winners. A large proportion ofthe shares that were sold as the bubble soared to its peak were those held by corporate executives who had acquired vast holdings of their companies’ stocks through options, and those of entrepreneurs whose companies had gone newly public as Wall Street investment banking firms underwrote huge volumes of initial stock offerings, many now worthless. Examining a group of executives in a mere twenty-five corporations in those categories, Fortune magazine placed sales of stock at $23 billion—nearly a billion dollars for the executives of each company.

The Vicious Circle
The market boom and bust were based not only on the delusions of the day but on a mutation from virtuous to vicious circle—a failure of character, a triumph of hubris and greed over honesty and integrity in corporate America. It’s facile to ascribe the wrongdoing of the era to just a few bad apples, and it’s true that only a tiny minority of our business and financial leaders has been implicated in criminal behavior. But I believe that the barrel itself—the very structure that holds all those apples—is bad.